More than half of folding carton converters will purchase equipment in 2011 (51 percent), according to Paperboard Packaging’s 2011 Exclusive Census Report research. Holding steady with last year, 38 percent of folding carton converters will increase their equipment-purchasing budgets this year.
 
In New York, a converter says new machines are “to keep up with our customers’ demand and to stay abreast of current technology.”
 
The folding carton plants cutting back on equipment spending this year are doing so because they bought in 2010 – 64 percent say this. Others report limited cash.
 
Thirty-eight percent of carton makers plan to spend between $1 million and $5 million on capital expenditures in 2011; 38 percent will spend up to a million. About one in five will spend up to $10 million, and 6 percent will spend more than $10 million.
 
New machines represent 76 percent of equipment purchases vs. 24 percent of purchased being used machines.
 
Ninety percent of machines were purchased, rather than leased.
 
What They’re Buying
Folding carton converters identify the equipment they intend to add this year as the following:
 
  Printing Press   48.4%  
  Material handling   35.5%  
  Diecutter   35.5%  
  Folder-Gluer   25.8%  
  Control system   19.4%  
  Adhesive/gluing equipment1   19.4%  
  Converting equipment   16.1%  
  Sheeter   16.1%  
  Safety equipment   12.9%  
  Inks   12.9% 
 
Folding carton plants were asked to identify the last piece of equipment they purchased to provide a snapshot of actual equipment purchasing activity. They are:
 
  Diecutter   22.8%  
  Printing press   21.5%  
  Folder-gluer   10.1%  
  Adhesive/gluing   8.9%  
  Sheeter   6.3%  
  Pre-press   5.1%  
  Control system   3.8%

Adding vs. Replacing
Two-thirds of carton plants bought additional equipment; the remaining third were replacing old machines.
 
Buying a machine for an existing market represents 84 percent of purchasing activity. Twenty-seven percent, however, buy to open up a new market. Top new industries include food/beverage and cosmeceuticals. POP and specialty printing are also new ventures for some carton converters.
 
Catherine Penn of Penn & Associates, Cleveland, contributed to this report.